At least 50% of alcohol sold in Scotland doesn’t meet the impending minimum price legislation, according to the latest data from Nielsen.
Impending Scottish legislation will see the introduction of a minimum unit price of 50p, impacting on the price of alcohol currently sold below the threshold.
Nielsen analysed epos data in nearly 1,200 stores across Scotland and found that spirits would be the most impacted, with 69% of volume currently sold below the 50p per unit threshold. Beer would the next most impacted with 67% of volume below the threshold, followed by cider (51%).
Wine was identified as having the most to gain from minimum pricing, as only 3.5% of wine sales would be impacted.
Blended scotch and vodka are the two categories impacted most by minimum pricing legislation. Blended scotch, overall, would require prices to rise 20% to meet the threshold, while vodka would require a 16.3% rise.
Marika Praticó, senior client manager at Nielsen, said: “Overall, wine will need to raise prices by the least amount, thus, it becomes more affordable relative to other alcohol. This break-even figure is 12.5%, as long as any potential decline in demand doesn’t exceed this the industry will benefit thanks to the higher price point. Should demand fall by more than 12.5%, that’s when their revenues will decline.
“It’s a good time for people to trade-up to the more expensive brands, which is likely to have a negative impact on supermarkets’ own-label offerings. There could be a near extinction of major price-saving deals offered by retailers in spirits, beer and cider, as most would potentially take the price paid for each unit of alcohol below the threshold.”
Nielsen speculated that there could be an increase in cross-border alcohol shopping among the Scottish to England and Ireland, where prices would be cheaper, as well as a “bumper Christmas for retailers” as consumers stock up before legislation comes into force.
The Scottish courts backed the proposals last month following a legal challenge from the Scotch Whisky Association, which had claimed the plans breached European law.